Depreciation on rental property inherited from a trust

[seng]

Our vacation condo was held in a revocable trust with our mother as trustee and I as successor trustee.  It was rented for the majority of the time.  After she passed, we decided to take the property out of the trust and is now deeded in my name only.  Am working on Schedule E for rental property.  Am I eligible to depreciate the property at its FMV at the time of her death?  Or am I eligible at all?

[Anonymous_]

If the trust was a standard revocable trust (e.g, a grantor trust) with your mother as grantor, then it became irrevocable when she passed. That essentially created a new entity that received the condo with a stepped-up basis (to fair market value on the date of her death).

If the foregoing is accurate, then your basis for depreciation is the FMV on the date of her death.

[seng]

Thanks so much!  Does the amount decrease over the 27.5 years and assuming so, is there a schedule or formula that calculates that?

[PattiF]

Yes, the property depreciates over 27.5 years. When you enter the information about the rental, TurboTax will calculate the depreciation and show it on the Depreciation Schedule. 

This article will guide you through the steps to enter the rental property in the return. The depreciation will start in the month when this was deeded in your name. 

Entering Rental Information

[seng]

Thanks to both of you for your answers to my questions!

[Mike9241]

depreciation is computed using the straight-line method so it will not vary from year to year - except for the first and last years.